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Healthcare leads U.S. earnings winners

Tuesday, February 10, 2015 - 01:45

Thomson Reuters data showed 73 percent of the 341 S&P 500 companies reporting earnings have topped expectations. Bobbi Rebell reports.

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The strong U.S. economy is contributing to profit growth at U.S. companies. With about two-thirds of the results in, Thomson Reuters data showing 73 percent of S&P 500 companies have beaten earnings expectations. And the healthiest sector? Thomson Reuters Greg Harrison: (SOUNDBITE) GREG HARRISON, SENIOR RESEARCH ANALYST, THOMSON REUTERS (ENGLISH) SAYING: "The strongest sector by far is healthcare. Over twenty percent earnings growth, and that's driven, in large part, by the biotechnology sub industry. Over a hundred percent growth within that sub industry, as some of those companies have launched new products within the last year, and they're really doing well." Other winners included technology and consumer discretionary. Topping the losers list, energy-related companies. Not surprising, given the falling oil prices. (SOUNDBITE) GREG HARRISON, SENIOR RESEARCH ANALYST, THOMSON REUTERS (ENGLISH) SAYING: "We're looking at 6.6 percent growth for the S&P 500 earnings. If you take out the energy sector, its closer to ten percent" But the stronger dollar is impacting U.S. companies that do a lot of international business. Chase Private Client Chief Economist Anthony Chan: ANTHONY CHAN, CHIEF ECONOMIST, JP MORGAN CHASE PRIVATE WEALTH MANAGEMENT (ENGLISH) SAYING: "There's no question that every time the dollar strengthens, that hurts U.S. multinational corporations, and, obviously, benefits European multinational corporations. For every ten percent appreciation in the trade value of the dollar, it shaves off almost three dollars S&P 500 earnings." But the affect of a strong dollar is not all bad. ANTHONY CHAN, CHIEF ECONOMIST, JP MORGAN CHASE PRIVATE WEALTH MANAGEMENT (ENGLISH) SAYING " When you tend to see a strengthening dollar in an environment where the U.S. economy is making progress, and by that I mean growth rates are picking up, and we expect growth to be stronger in 2015 versus 2014, you get a little multiple expansion, so it kind of offsets some of it." That said, Thomson Reuters data still shows companies are being conservative in their estimates for the rest of 2015.

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Healthcare leads U.S. earnings winners

Tuesday, February 10, 2015 - 01:45